Mayor Ford maintains that his administration can find ways to scale back spending without compromising city services. In this ongoing series, we consider whether these suggestions will help balance the budget, and also balance fiscal restraint with Torontonians’ service needs .
AutoShare was founded with the help of seed money from the Toronto Atmospheric Fund. Photo by 04deveni from the Torontoist Flickr Pool.
WHAT’S THE PROPOSAL?Deputy Mayor Doug Holyday (Ward 3, Etobicoke-Centre) has called for a review of the Toronto Atmospheric Fund, an arm’s-length City agency that provides loans and grants to support select environmentally inclined projects. TAF was founded twenty years ago, with twenty-three million dollars from the sale of the City’s Langstaff Industrial Farm, a jail farm in Richmond Hill that the City acquired in 1911.
Currently, TAF’s spending decisions are ratified by a board of directors consisting of four city councillors and seven citizen members. Holyday has said he’d like to investigate changing TAF’s governance structure, so that city council would have final say over when and why it opens its purse.
HOW WOULD IT AFFECT TORONTO?Money from TAF is funnelled to nonprofits, charities, and City agencies that want to invest in technology that will in some way benefit Toronto’s environment. The Fund also makes investments globally, to maintain its endowment. TAF’s lists of current grants and loans include funding for everything from LED lighting, to solar energy, to high-rise retrofits, to energy-saving Zamboni attachments, to environmental advocacy groups like the Toronto Environmental Alliance.
The immediate cause of Holyday’s call for a review of TAF seems to be its recent approval of a half-million-dollar investment in a wind energy farm on Georgina Island in Lake Simcoe. “I just don’t see the benefits to the citizens of Toronto to be sending $500,000 up to Georgina Island,” Holyday has said. “I would have thought there would be more direct projects right in the city.”
The most likely outcome of a TAF review is a change in its criteria for distributing funds, perhaps putting them more in line with the wishes of elected representatives rather than those of its current, largely unelected board.
TAF is already bound to operate according to City-approved guidelines, however.
“All of our investment decisions are made under the terms of an investment policy, as any foundation has to have, which is approved by the City’s chief financial officer and council,” Julia Langer, executive director of TAF, told us this week. “So there’s an established framework by which all of our spending and investments are made.”
HOW MUCH WOULD IT COST OR SAVE?“Sometimes there’s confusion between spending and lending,” said Langer. “The project [Holyday] mentioned as being outside of Toronto, it’s a loan.” As a loan, TAF’s investment in the wind energy farm will be paid back with interest, with the proceeds to eventually be spent locally.
“It’s a revenue-generating program,” said Langer of the wind farm. “It’s not a grant.”
Langer told us the current value of TAF-issued loans is about three million dollars. Board members look for a “double return” on investments: both a market return (that is, repayment) and an energy savings of some kind. TAF gives loans globally, to diversify its portfolio. It only awards grants (i.e. dispersals with no expectation of repayment) to local organizations and City agencies.
Langer said she hadn’t yet spoken about the matter with Mayor Ford, or any members of his staff or his executive committee.
IS IT BALANCED?Probably not.
In 2009, TAF’s annual report pegged its total assets at $23,190,027, almost exactly the same amount as the original endowment. Financial statements from every year over the course of the past decade tell a similar story: TAF, supported by its own investments, has largely been a cost-neutral enterprise from the City’s standpoint. It’s hard to imagine a scenario in which city council could make it more cost efficient.
“In fact, the savings, just from a few projects, a few financial investments that we’ve made over the years, total fifty-five million dollars in actual, financial savings to the City,” said Langer. “And we don’t draw on the City’s tax base.”
All the evidence points to a TAF that has been providing a good value to the City, at no direct cost to taxpayers. Any overly intrusive political meddling would be unwarranted and a little strange.
Illustration by Brian McLachlan/Torontoist.
Hat tip to the Star‘s Smell Test, which got us mulling over a series like this in the first place.